“Children will be suffering from malnutrition” … a UN peacekeeper with locals in Port-au-Prince,
where hunger-provoked protests and looting have left six dead. Photo: AP

THE poorest countries face starvation and civil unrest if global food prices keep rising, says the head of the International Monetary Fund, Dominique Strauss-Kahn.

Hundreds of thousands of people would starve, he said in Washington. “Children will be suffering from malnutrition, with consequences for all their lives.”

He predicted that rising food prices would push up the cost of imports for poor countries, leading to trade imbalances that might also affect developed nations.

“It is not only a humanitarian question,” he said.

Global food prices have risen sharply in recent months, driven by rising demand, poor weather and an increase in the area of land used to grow crops for biofuels.

The United Nations Food and Agriculture Organisation says 37 countries face food crisis. The president of the World Bank, Robert Zoellick, urged members on Sunday to provide $US500 million ($540 million) by May 1 to help alleviate the problem. Continue reading »

(AXcess News) – Gas pumps in the United States tell the same story as rice prices in Thailand: Inflation is a global phenomenon this year.

Oil hit a record $112 per barrel this week, and a United Nations official warned of continued pressure on food prices, which by one index are up 45 percent in the past year.

The challenges are worst in developing nations, where raw materials account for a larger share of consumer spending. But another factor – the sagging value of the US dollar – means that imports cost more in America and other nations that peg their currencies to the dollar.

Still, regardless of this currency phenomenon, several broad forces are pushing prices up.

After years of strong global economic growth, prices of oil, grains, and some metals have spiked. Investors are adding fuel to that fire by buying up hard assets like commodities, which are viewed as a hedge against inflation.

More fundamentally, many nations have been relatively loose in the creation of money supply. For all the news about interest-rate cuts by the Federal Reserve, this trend goes well beyond US shores.Continue reading »

Financial markets are tumbling. The world economy is starting to sputter. Food prices have shot up so far, so fast, that there are riots in the streets of many poor nations.

It’s a hard time to be one of the masters of the global economy.

Those leaders — finance ministers from all over the world — are gathering in Washington this weekend to sort out their reactions to the most profound global economic crises in at least a decade. The situation could reveal the limitations that international economic institutions face in dealing with the risks inherent to global capitalism.

“There’s got to be something coming out of the weekend, a way to visibly assume public responsibility for trying to limit the damage that financial markets can do to our society,” said Colin Bradford, a senior fellow at the Brookings Institution. “The pressure is on politicians this weekend to come up with an answer. . . . What is the power structure going to do about this?”

The Group of Seven finance ministers of major industrialized countries meet today, and the governing boards of the International Monetary Fund and World Bank will meet tomorrow and Sunday. Their agendas: in the case of the G-7 and IMF, countering the breakdown in financial markets; in the case of the World Bank, food inflation that threatens to drive more of the world’s poorest people into starvation. Continue reading »

Washington (AHN) – The executive board of the International Monetary Fund has approved the sale of some 440.3 tons of its gold supplies in a wide-ranging financial overhaul and to replenish its depleting coffers.

Dominique Strauss-Kahn, IMF managing director, welcomed the board’s move on Monday, the action seen as a buffer to the expected $400 million budget deficit the Washington-based lending institution could experience in the next few years.

The board is projecting to generate at least $11 billion from the sale of at least 12 percent of its gold reserve. The money to be generated from the sales would fund the reorganization of the IMF and finance lending to needing countries. Continue reading »

The International Monetary Fund released its semiannual Global Financial Stability Report, predicting that the economic crisis “is spreading beyond the US subprime market.” The report comes ahead of the IMF and World Bank spring meetings.

The International Monetary Fund said Tuesday the worldwide losses stemming from the US subprime mortgage crisis could hit 945 billion dollars as the impact spreads in the global economy. Continue reading »